January 01, 2014

Social Media

I've spent the past five years soundly criticizing social media, as it relates to commerce, and for good reason! We were told that social media would be responsible for a ton of business.Then it didn't happen ... so the social media experts blamed the victims ... the businesses they sold their mess of promises to ... it's their fault, they implemented strategies incorrectly.All of that is largely behind us, now. The future is clear.

If you are a business with under $10,000,000 in sales and Jasmine as a customer, social media means everything.

If you are a business with Judy as a customer, social media is meaningless.

A $10,000,000 business with Jasmine as a customer might generate 20% of their business via social media. Meanwhile a $1,000,000,000 (billion) business might generate between 0.2% and 1.0% of volume from social media. Let's go with 0.6%.

Pretend you are a billion dollar business, generating 0.6% of your volume from social media.

That's $6,000,000 in annual sales.

That's between $900,000 and $2,400,000 (depending upon the business model) in annual profit.

What does this mean?

Social Media gurus: STOP TALKING ABOUT ENGAGEMENT! It causes Execs and just about anybody else to TUNE OUT!

TALK ABOUT PROFIT. If you work for a major mall-based retailer, your social media work is responsible for a ton of profit. Use this as a case to get you the resources you need.

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Kevin Hillstrom, President, MineThatData

Kevin is President of MineThatData, a consultancy that helps CEOs understand the complex relationship between Customers, Advertising, Products, Brands, and Channels. Kevin supports a diverse set of clients, including internet startups, thirty million dollar catalog merchants, international brands, and billion dollar multichannel retailers. Kevin is frequently quoted in the mainstream media, including the New York Times, Boston Globe, and Forbes Magazine.

Prior to founding MineThatData, Kevin held various roles at leading multichannel brands, including Vice President of Database Marketing at Nordstrom, Director of Circulation at Eddie Bauer, and Manager of Analytical Services at Lands' End.

You may contact kevin at kevinh@minethatdata.com.

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